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Vietnam to Begin Taxing Trademark Use

In November, Vietnam’s finance ministry released a letter saying Vietnam taxpayers who purchase rights to foreign trademarks owe a value-added tax. This has potentially serious ramifications for companies operating in Vietnam. Before this letter, Vietnam’s official policies were not clear or consistent, and “in many cases, no VAT was imposed on trademark licensing,” according to Tran Manh Hung of Baker & McKenzie. The letter is at least partly retroactive, as businesses that did not declare and pay their taxes on trademarks by November 7 will be affected.

The main question regarding this tax is the legal structure of the company. A Vietnamese party who has a trademark fully transferred to them will not have to pay taxes, but if they are only granted the right to use the mark, Vietnam will collect a tax of between five and ten percent. Apparently, Vietnam does not view a grant to use a mark as a transfer of technology or scientific services. Understandably, Vietnam has been getting a significant amount of pushback from corporations.

Prominent American companies that do business in Vietnam include Anheuser-Busch, Avon Products, Boeing, Coca-Cola, DuPont, FedEx, Hewlett Packard, Kids “R” Us, Nike, PepsiCo., and Wal-Mart. Almost all large companies have significant resources devoted to trademark protection, and this new policy will certainly affect how they do business. It is possible that Vietnamese parties will wind up paying this tax for foreign contractors if the contracts are not negotiated properly, because “Vietnamese parties are responsible for deducting, declaring and paying relevant taxes for an on behalf of foreign contractors.”

This new policy is part of Vietnam’s program to update its intellectual property protection on the heels of trade deals with European countries and countries that were party to the Trans Pacific Partnership. Although the U.S. has stated it will withdraw from the TPP, that does not necessarily mean it will not go forward. Regardless, this is a trend international companies certainly hope will not catch on.

MARS INC. SUES COMPETITOR FOR BARKING UP THE WRONG TREE

On November 21, Law360 reported that Mars Inc. has sued J.M. Smucker Co. and its pet food subsidiary alleging willful trademark infringement for the name of pet treats. Mars Inc. has a trademark on the name “Pill Pockets,” which they use for pet treats, and J.M. Smucker Co. has a pet treat product line named “Pill Pouches.”

While the name Mars Inc. may not immediately ring a bell with you, you should be very familiar with their products. Mars Inc.’s pet care line includes Banfield Pet Hospital, IAMS, and Pedigree. Its chocolate line includes American staples such as 3 Musketeers, M&M’s, Snickers, Twix, Dove, and Milky Way. Finally, its Wrigley line includes Skittles, Starburst, Orbit gum, and Juicy Fruit. In contrast, J.M. Smucker Co.’s brands include Jif Peanut Butter, Smucker’s Uncrustables, Folgers Coffee, and Milk-Bone dog treats.

Most pertinent to this case, Mars has sold its pet treats, called Pill Pockets, under its “Greenies” brand since 2002. Mars reportedly made Smucker aware of this alleged infringement at a conference in January. Mars followed up with a cease and desist letter in March, but Smucker’s allegedly never responded and launched Pill Pouches in August, selling and advertising it across the country. Mars Inc. says these actions “perpetrate a scheme to confuse the public and misappropriate the enormous goodwill of the Pill Pockets brand” by taking advantage of the goodwill and reputation established by Pill Pockets.

It’s tough to say how strong Mars Inc.’s case is. As a dog owner myself, I do buy Smucker’s Milk-Bone treats but did not know until this week they were owned by the Smucker’s company. That’s not to say there aren’t people who are very loyal to Pill Pockets – I’m sure there are many, and it’s possible some of them have been confused about the emergence of Pill Pouches. This will be an interesting storyline to follow moving forward.

If you’re a sports fan, or even own a television, you’re aware that this year’s World Series features two teams with long, storied histories. Unfortunately, neither of these histories feature much winning. The Chicago Cubs, the National League champion, haven’t won a World Series since 1908 and haven’t even been to the Fall Classic since 1945. Similarly, the Cleveland Indians, winners of the American League pennant, last won a World Series championship in 1948. But the Indians have been in the news lately for another reason as well – for controversy over their “Chief Wahoo” logo.

Chief Wahoo Logo

If you follow me on Twitter (@sjgee24), you saw that I retweeted a link on October 17 about a legal activist, Douglas Cardinal, asking an Ontario court to ban the Indians from using their team name and Chief Wahoo logo in the games played in Toronto during the American League Championship Series matchup against the Toronto Blue Jays. Ontario Superior Court Justice Tom McEwen dismissed this idea fairly quickly.

Even though this case was brought in a Canadian court, rather than within the United States patent and trademark system, it is an example of an issue becoming more and more prominent in today’s society. There are many who put Cleveland’s “Indians” logo and name in the category of offensive and disparaging marks, which are not supposed to be subject to trademark protection in the United States. However, this raises the issue of First Amendment protection, and whether these marks should fall under the category of free speech, regardless of whether they are disparaging or not. The general issue is whether disparaging or offensive marks should be granted trademark protection by the law. Some do not want these marks to be able to be used at all, while some think their use falls under free speech, but they should not be granted legal protection.

This question has been in the news fairly frequently as of late. In 2014, the National Football League’s Washington Redskins lost a USPTO ruling and had their trademark registration revoked. And on September 29, the Supreme Court granted certiorari to hear In re Tam (“The Slants” case), to decide whether the USPTO’s ban on offensive trademarks violates the First Amendment.

The Indians appear to be aware of the public backlash associated with the use of the Chief Wahoo logo. Chief Wahoo has been replaced with a block “C” on the Indians’ helmets and batting helmets, although he is still featured on the left sleeve of their jerseys. It’s important to note that if the Indians were to lose their trademark registration in the future, that would not mean they could not continue using the mark. They would only lose protection from potential trademark infringement.

Regardless of the future of the Indians’ Chief Wahoo logo, its current use will likely be more scrutinized than it ever has been in recent memory because its use in this historic World Series. While you’re watching, see how heavily Chief Wahoo is emphasized on Cleveland’s uniforms and throughout the ballpark. This will be an interesting storyline to follow throughout the series.

Herman Miller v. Office Star

On Tuesday, October 11, a federal jury in California awarded Herman Miller Inc. $8.4 million in a trade dress lawsuit against Office Star. Office Star was accused of using Herman Miller’s overall look of its Eames office chair line in the trade dress suit.

Herman Miller is best known for its office furniture, specifically its office chairs. In addition, it also manufactures other office furniture and offers “solutions” for their customers, focusing on making the workplace a better environment through products and layouts for offices, healthcare settings, and homes. One particular line of chairs, the Eames office chair, is sold for between $1,500 and $3,319, according to the Herman Miller website.

In contrast, Office Star is a furniture company that does not advertise itself as offering any kinds of “solutions” besides their product itself. Office Star has a line of “Executive Chairs,” which do appear, at first glance, to be similar to the chairs sold by Herman Miller. However, Office Star’s most expensive chair is sold for $460, less than a third of Herman Miller’s cheapest offering in their similar line.

This suit arose because when Herman Miller alleged that Office Star had ripped off their “overall look” and infringed their trade dress. Trade dress is defined as the “overall commercial image (look and feel) of a product that indicates or identifies the source of the product and distinguishes it from those of others,” including design, product labeling/packaging, and the environment where the services are provided. Herman Miller felt that Office Star, by offering a very similar product, was infringing and capitalizing upon the well-known and respected image Herman Miller has built for over 50 years. By offering what a typical consumer may believe to be a similar product for up to 15% of the cost (in some cases), Office Star was able to use some of this goodwill to sell their own product.

In this case, the jury sided with Herman Miller after a nine-day trial. The jury’s decision shows the importance that trade dress can play in the everyday life of a consumer, and the effect of something as simple as the design of an office chair on a company’s reputation

Copycats on the Prowl – How to Protect Your Legacy

You have probably heard the proverb, “necessity is the mother of invention,” but to us it has a whole different meaning. You see, we work with inventors every single day and if there is one thing we know to be true it is that mothers invent a lot.

Let me say that again. Mothers. Invent. A. LOT.

And I’m not just talking about the act of birthing children as an ultimate form of invention (take THAT Einstein), but rather the MILLIONS of mommy products, services, and ideas just a click away online. And why not? If you can keep your toddler’s shoes on you can accomplish anything.

The goal isn’t to live forever; the goal is to create something that will. –Chuck Palahniuk

The fact is that mommies are busy, stressed, and exhausted, but they are also innovative — always creating ways to make the mommy life easier. And if a mom comes up with something really worthwhile she might like to share it on sites like Etsy or Amazon.

But as I always tell my clients, an idea worth sharing is an idea worth stealing (or copying). And when someone copies your idea it’s like punching you in the face and then running away with your toddler’s ice cream cone. Not cool.

Forget what you tell your kids about sharing. If you and your best friend were both whisked away by Chris Hemsworth, you might have to destroy her in order to claim what is yours. You can’t pee without your kids wanting to join you, but you shouldn’t have to share Chris Hemsworth.

And you shouldn’t have to share your best creations or ideas either. You should be able to leverage these things to pay for music lessons, vacations, or college without worrying about some copycat skimming off the top. You want your kids to piggyback off of you, not some stranger wannabe on the other side of a computer screen.

So how do you stop the copycats from stealing the goods? Intellectual property. Just follow the recipes below.

Note: These are cookie cutter recipes but you are a snowflake. Please consult an attorney to learn how best to approach your unique situation.

It may seem like folly to some Texas residents to think that federal law protects ideas that seem impossible to most people. However, without people who follow their “impossible” dreams, many of today’s household objects — such as iPhones, toasters and microwaves — would never have been invented. Patent law protects those who are willing to look outside the box and create something new that could possibly change the way we live.

In this context, Toyota’s latest patent application looks less like folly and more like a hope for the future. Numerous Hollywood movies and television shows have featured the company’s latest idea — flying cars. Toyota may not be the only one who has applied to patent an idea for a flying car, but that does not mean the application will not go through.

The car manufacturer’s idea may be different from others. The patent outlines a stackable wing design that it believes could be viable one day. Many companies, and individuals patent several concept ideas just in case they become a reality at some point in the future. As long as the idea meets the requirements set forth in patent law, Toyota may become the owner of a patent for a flying car.

Companies and individuals here in Texas should not hesitate to take their ideas and concepts to the next level. While still in the theoretical stage, applying for a patent may be a good idea. The process can be complex and even frustrating. A patent law professional can help make the process easier so the applicant can continue working to bring his or her idea to fruition.

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Vietnam to Begin Taxing Trademark Use In November, Vietnam’s finance ministry released a letter saying Vietnam taxpayers who purchase rights to foreign trademarks owe a value-added tax. This has potentially serious ramifications for companies operating in Vietnam. Before this letter, Vietnam’s official policies were not clear or consistent, and “in …Read More »